Apple to Cut iPhone 6s and 6s Plus Production by 30% in Q1 2016

[maxsix]

I find it interesting that amongst all the posts there's a trend of people explaining why they are _not_ upgrading their iPhones. It's as though a wave of common sense is washing across the populace, at least across those who are choosing fiscal responsibility over just throwing money at Apple for the latest product. As it has been noted, now that bundling has been replaced by monthly payments via the AT&T Next style programs, consumers that weren't paying attention are now aware that they are paying far more than the $199 price they previously thought they were paying for Apple's smartphone. It's almost as though the ruse is revealed and consumers are wide awake now.

 

[Celf]

This has got to be down to the price. The 6s is ferociously expensive in Europe, comparable phones from competitors are hundreds of euro cheaper.

I fully agree. I'd love to switch from a Note 4 to an iPhone 6S plus (64 gig) but the 1100 dollar (or 969 euro) price tag is definitely holding me back. It's almost 300 USD more expensive than my Note 4 introduction price (699 euro)!!!

 

[horvatic]

Apple will cut production on the iPhone 6s and 6s Plus by approximately 30 percent in the first calendar quarter of 2016, reports Nikkei. Citing lackluster sales, Nikkei says iPhone 6s and iPhone 6s Plus inventory has "piled up" at retailers across the world, leading Apple to scale back production from January through March to get rid of excess stock.

Apple is said to have originally told its suppliers to continue Q1 2016 production of the iPhone 6s and iPhone 6s Plus at the same rate as the iPhone 6 and iPhone 6 Plus a year prior, but waning sales led the company to change its plans.

It is not unusual for Apple to scale down device production as an iPhone matures, but the rumored 30 percent cut from January to March is being positioned as an abnormally large production drop. Downscaled production is only expected to last through March as dealers sell through their current stock, with orders returning to normal during the April-June quarter after Apple's inventory adjustment has been completed.

Apple's production cut will impact parts suppliers in Japan and South Korea, including Japan Display, Sharp, LG Display, Sony, TDK, Alps Electric, and Kyocera. Following Nikkei's report, Apple stock has fallen two percent and hit a low of $102.41 earlier today.

Article Link: Apple to Cut iPhone 6s and 6s Plus Production by 30% in Q1 2016

Who says? If Apple didn't say that then it's not true. More anal-ist B.S. guessing trying to tank the stock price.

 

[kodos]

Premium cell phones are expensive. Not just Apple ones, look at the prices of Samsung phones. I think as carrier subsidies go away, and phones become "good enough", we will see a situation arise similar to that which hit the PC market. Most people have a five year old computer that is "good enough" for what they need it for. As the gap between premium handsets and mid-range or entry-level handsets continues to shrink for most day-to-day tasks, the issue of high premiums for phones will start to raise its head more and more. In search of profitability, manufacturers might need to make some big steps towards cost reduction on the phone - without cheapening the final product. Fewer units at a high profit margin is still a big win. Hopefully Apple will shield itself from the "race to the bottom" that plagues almost everyone else.

Given that if you have an iPhone, you are basically set for a few years with a very good device - I don't see the burning need to upgrade all the time. Unless the team at Apple can come up with a breakthrough phone again, I think we will also see them continue to focus on foreign (underdeveloped) markets more and more in the near future, barring something very impressive for the iPhone 7.

Personally, I think we have been living in a little bit of a "tech bubble" that Apple started with some very revolutionary products. Maybe they will do that again, but it wouldn't surprise me to see a bit of deflation of "gotta have it tech" across the board for a little while until the next breakthrough device comes out.

It might be a phone, it might not be. If anyone can crack how to free ourselves from these atrocious service providers we have in the USA, they would probably make a ton of $$$ on that device!

 

[Wahlstrm]

Agreed, when you are paying more for your phone than you do for your computer, something is wrong with the pricing. You can currently by a Macbook Air 11" for LESS than a 128 GB iPhone 6s plus.

This usually gets me to when I shop around for a new phone..

Today when you can get a nice laptop for the price of a phone, then the phone starts to look a bit expensive..
I paid a "iPhone 6s+ 128GB" for my 2015 13" MBP 128GB..
[doublepost=1452099968][/doublepost]

Maybe this would be a good time for Apple to contemplate how to make a tablet or laptop that people really, really want, not an iPad Pro and a new MacBook for niche markets?

Yeah, how about putting the "phone app" in the iPad?

 

[Chupa Chupa]

Hate to admit it but iPhone growth is done. It would seem Apple clearly missed its own sales estimates with this production glut as Apple typically only keeps a 4-6 week inventory, seasonally adjusted, of course. Will be interesting if the knives start coming out for TC. He is a caretaker CEO. Apple desperately needs a leader.

This isn't about the iPhone being too expensive. Consumers will spend big $ on things they desire. It's about the maturation of the iPhone and each successive revision being more and more evolutionary than revolutionary. There really isn't a need to upgrade every year or even two years. In short, the smartphone has transformed into a boring tool of life from a cool piece of gadgetry. Who buys a new drill or dinnerware every two years?

 

[Michael Scrip]

One side effect is that Apple has apparently been pushing retailers to buy more units upfront. This gives great sales numbers for Apple to brag about, but then leads to lower Apple sales a quarter or two later as inventory piles up on store shelves. It's a classic case of what people call "shipped, not sold" when they talk about other companies.

Those iPhones eventually get sold to consumers, right?

I've never heard of a store sending iPhones back to Apple because they couldn't unload them.

I would imagine Apple products spend the least amount of time on store shelves, in warehouses, etc.

Apple says they sold 231 million iPhones over the last 4 quarters. That's over 600,000 every day. They're going somewhere.

 

[RedOrchestra]

Hate to admit it but iPhone growth is done.

I upgraded from a 4 to a 6 - I only use it to phone, to message, and to take photos. The only reason I will likely go to a 7, this fall, is because my provider made me a hardware rebate offer I could't refuse.

 

[AZREOSpecialist]

... or Apple is cutting production in anticipation of an April iPhone 7 launch. Some media outlets have speculated as to an earlier April launch to the next handset. But whatever the reason, iPhone 6s is no better than an iPhone 6 for 99% of tasks. Force Touch is not sufficient to warrant an upgrade, and neither is a better camera. The previous generation iPhone 6 Plus is plenty fast for everything anyone needs to do.
[doublepost=1452103100][/doublepost]Apple has been slipping for the last few years. Apple TV 4 is somewhat of a train wreck, it's obvious that neither Tim Cook nor anyone else in senior management actually used the product or interacted with it in any meaningful way. iPhone has simply been iterated in its boring, same-old form factor and without any new, obvious innovations besides a larger screen. The larger screen was playing catch up with the rest of the industry.

The only new product that has been launched under Tim Cook was Apple Watch. We can all see how lackluster that product has been. I used one in the store and could barely see what was on the watch face - too faint, too small. Using Apple Watch is a very awkward experience. Turn the crown and the experience feels inexpensive for a product that costs close to $1,000 with a metal band.

Apple's ability to juice the products that were blessed by Steve Jobs is running out. With a bean counter at the helm, there is little chance Apple will produce anything revolutionary or fantastic anymore. Apple needs someone like Elon Musk at the top. Only then can it recapture its former glory.

 

[KPOM]

Design as horrid as last year, marginal performance improvements, gimmicky 3D touch feature and even worse battery. Least exciting update to date.

Jony Ive in particular needs to step it up.

What's so gimmicky about 3D Touch? I find it very useful. I have a transit app that lets me access up to 4 favorite stops directly from the home screen. I can find out in seconds when the next train is arriving. That's a lot more convenient than the old method (lots of tapping around within the app).

As for marginal performance improvements, that would be the 5S to the 6. The 6S doubled the RAM and significantly sped up the processor.
[doublepost=1452104071][/doublepost]

The only new product that has been launched under Tim Cook was Apple Watch. We can all see how lackluster that product has been. I used one in the store and could barely see what was on the watch face - too faint, too small. Using Apple Watch is a very awkward experience. Turn the crown and the experience feels inexpensive for a product that costs close to $1,000 with a metal band.

Apple's ability to juice the products that were blessed by Steve Jobs is running out. With a bean counter at the helm, there is little chance Apple will produce anything revolutionary or fantastic anymore. Apple needs someone like Elon Musk at the top. Only then can it recapture its former glory.

Have you actually used any recent Apple products? The Watch is fine. It isn't mean for long interaction. It's a watch. I've never had a problem reading the screen. Compared to the first iPhone, the first Apple Watch is light years ahead.

The MacBook, while iterative, is a great product. How do we know? Look how many companies revealed MacBook clones yesterday, including the HP EliteBook Folio (which looks just like it, except it has 2 USB-C ports).

As for why Apple was playing catch up on larger screens, it's because Steve Jobs "knew" that 3.5" was the "perfect" size for a smartphone screen, and his right-hand man Scott Forstall hard-coded iOS' resolution to reflect that. They simply couldn't build larger screens until they rewrote iOS (starting with iOS 7) to handle higher resolutions more easily.

Also, Tim Cook isn't a "bean counter." He was the COO, not the CFO, before taking over as CEO.

 

[kdarling]

As for why Apple was playing catch up on larger screens, it's because Steve Jobs "knew" that 3.5" was the "perfect" size for a smartphone screen, and his right-hand man Scott Forstall hard-coded iOS' resolution to reflect that. They simply couldn't build larger screens until they rewrote iOS (starting with iOS 7) to handle higher resolutions more easily.

Yep, Apple got stuck for a while with legacy issues, just like the smartphone makers who had preceded them.

As for screen size decisions, I suspect that Tim is a bit sorry that he went on record during the 2Q 2013 earnings call, when he answered investors questioning the 4" iPhone screen, with:

"We've put a lot of thinking into screen size and we think we've picked the right one." - Cook

 

[MacMilligan]

I skipped this gen (I'm still on the 5S and was planning to go to the 6S) but the 16GB base storage killed it for me. Felt bad having to pay $300+ subsidized for decent storage.

 

[enrilo]

I skipped this gen (I'm still on the 5S and was planning to go to the 6S) but the 16GB base storage killed it for me. Felt bad having to pay $300+ subsidized for decent storage.

Same for me.

 

[Jvanleuvan]

I'm still using an iPhone 6 Plus, but (for those using a 6S) was Force Touch and a better camera vast improvements for you to have upgraded? And how's the extra RAM helping you?

I've always felt that the "s" version of the Iphone was NOT meant for the people one generation back, but two.

For example, I had a 5s, my two years were up, so I got a 6s, and yes, it was a huge improvement over the 5s. For those on a 6, They should likely update to the 7.
[doublepost=1452116924][/doublepost]

Design as horrid as last year, marginal performance improvements, gimmicky 3D touch feature and even worse battery. Least exciting update to date.

Jony Ive in particular needs to step it up.

The design from last year set record sales, so it can't be that bad. (plus the "s" model always has the same body as the previous gen. were you surprised?)

3d Touch is actually quite nice, hardly gimmicky. Assuming more 3rd party apps begin to use it it will become something people just expect.

 

[Ballis]

The design from last year set record sales, so it can't be that bad. (plus the "s" model always has the same body as the previous gen. were you surprised?)

3d Touch is actually quite nice, hardly gimmicky. Assuming more 3rd party apps begin to use it it will become something people just expect.

The phone sold well because it was larger, not because it looks good. It doesnt.

3D touch will remain a gimmick until developers can add integral features using it. That wont happen untill very few non-supported phones are in circulation. With the 6C rumored to be such a device, this wont happen soon.

 

[kgtenacious]

Nikkei didn't cite any sources for their information so their article seems pretty sketchy... The relatively modest drop in Apple's stock price seems to reflect investors' skepticism.

You could try the WSJ article: http://www.wsj.com/articles/apple-scales-back-orders-for-its-iphones-1452049390

 

[swester]

It's probably not a coincidence, but my 5S is the first iPhone I've owned that I have no desire to turn in for an upgrade. Having handled both, neither the 6 nor the 6S (and especially not the Plus) appeals to me at all. They're just too big, and without any real standout features.

As long as the battery doesn't tank in the next year or so, I really can't think of a reason why I would even bother upgrading.

 

[Erdbeertorte]

I think they just produced precautionally much more than they expected to sell, to prevent what happened the year before.

One month after release many versions weren't in stock anymore or couldn't be even pre-ordered from most resellers. Some of them even sold it for a higher price than Apple, also people on eBay.

I ordered one that should have been shipped within 24 hours, but after one week it still did not arrive and I already sold my old one on eBay in the meantime and wanted to travel two days later.

So I had to make a online reservation and appointment in an Apple Store very early in the morning the next day to get a free time slot.
I had to wait there more than an hour in a long row. It looked like it was the first day, but again that has been ONE MONTH after it was available.

They learned from that and made sure no to get out of stock again so fast. So there are now enough available and they don't have to produce that much anymore.

 

[macfacts]

http://business.financialpost.com/i...iday-amid-report-that-iphone-output-cut-by-30

Looks like Foxconn workers are getting an extra long Chinese New Year break.

 

[Karma*Police]

You could try the WSJ article: http://www.wsj.com/articles/apple-scales-back-orders-for-its-iphones-1452049390

I could, but the question is, why I should trust them any more than Nikkei? It wasn't that long ago that they confirmed another Nikkei piece about Apple cutting its display orders in half, implying iPhone demand had fallen off a cliff, but Apple had another record breaking quarter.

Only Apple knows for sure what their sales were last quarter and everyone else will know in a couple of weeks.

 

[duffman9000]

I find it interesting that amongst all the posts there's a trend of people explaining why they are _not_ upgrading their iPhones. It's as though a wave of common sense is washing across the populace, at least across those who are choosing fiscal responsibility over just throwing money at Apple for the latest product. As it has been noted, now that bundling has been replaced by monthly payments via the AT&T Next style programs, consumers that weren't paying attention are now aware that they are paying far more than the $199 price they previously thought they were paying for Apple's smartphone. It's almost as though the ruse is revealed and consumers are wide awake now.

In a moment of frustration with my 6+, I tried to buy a 6S+ a few weeks before Christmas. For some stupid reason my CC was rejected. I'm glad it was. Frankly, I'm tired of trying to troubleshoot. If I have to deal with troubleshooting I at least want to be able to install whatever tools I need. Apple isn't going to budge in that regard.

I hope this story is true and there is big drop off in orders.
[doublepost=1452148902][/doublepost]

The iPhone 6S is just too expensive. The 64GB iPhone 6S Plus is the same price as the 11inch MacBook Air....

And it will have less than half the usable life span. Oh you just wait until iOS 11 crushes that phone.

 

[Shanghaichica]

This is the iPhone cycle. Maybe the 6S has not sold as much as the 6, however Apple's production cycle is geared to selling a lot during September-December. Sales always dip from January onwards so production has to be reduced accordingly.

 

[Rogifan]

Hate to admit it but iPhone growth is done. It would seem Apple clearly missed its own sales estimates with this production glut as Apple typically only keeps a 4-6 week inventory, seasonally adjusted, of course. Will be interesting if the knives start coming out for TC. He is a caretaker CEO. Apple desperately needs a leader.

This isn't about the iPhone being too expensive. Consumers will spend big $ on things they desire. It's about the maturation of the iPhone and each successive revision being more and more evolutionary than revolutionary. There really isn't a need to upgrade every year or even two years. In short, the smartphone has transformed into a boring tool of life from a cool piece of gadgetry. Who buys a new drill or dinnerware every two years?

"It would seem" blah blah yet Apple hasn't reported one thing for last quarter nor provided guidance for the current quarter. I posted a link to a front page article from the WSJ from early January 2013 where they claimed Apple was cutting orders with suppliers by 60% due to weaker than expected iPhone 5 demand. The stock sold off hard yet nothing in Apple's financials ever bore out this WSJ story. If Apple reports a flat or negative holiday quarter and provides weak guidance for the March quarter then we can have this discussion. But to make declarative statements based off of supply-chain noise, not Apple's financial results is ridiculous.

http://business.financialpost.com/i...iday-amid-report-that-iphone-output-cut-by-30

Looks like Foxconn workers are getting an extra long Chinese New Year break.

Which Foxconn denied. But hey if the financial post is reporting it and the meme is iPhone is Doomed™ then it must be true.

 

[Jax44]

... and everyone starts wondering.... how could THAT happen...

The product has just started to SUCK.

Been using iPhone since day one... and upgraded each year. Now I have the 6Plus.

With iOS9 - I lost My Patience.

1) Launching the Camera makes sure that you LOOSE any precious moment. Because the stupid app HAS to blur (Fade) in. Thus taking way too long to become operational.
2) iOS 9 has slowed down the phone to a crawl
3) Battery time is ridiculously short. And Apple's answer was to produce the hump. The ugliest design EVER made.
4) Ive's obsession with thin products is almost funny. He design the products so thin that
A) A functional Battery won't fit in
B) The user can't hold on to it
C) It bends easily
D) User needs to purchase a case 3 times as thick as the phone... So that every iPhone user becomes recognizable at 100 feet's distance due to the overly thick brick he needs to carry in order for his thin phone NOT to break.

Folks won't stand for this kind of equipment and as much as I love Apple (I really do) I WILL have to mind productivity over beauty.

With Each OS be that iOS or OS X quality and stability has degrade severely. And I take that this will continue.
Even developers are now refusing to install Apples Pre-Release Software due to so intense unreliability and if no one installs the pre-release software - how on earth are the nasty bugs going to be spotted PRIOR to Public Release.

Dark Days ahead of us !

Ha ha.

Good one.
[doublepost=1452172813][/doublepost]

You could try the WSJ article: http://www.wsj.com/articles/apple-scales-back-orders-for-its-iphones-1452049390

Even sketchier.

 

[Chupa Chupa]

"It would seem" blah blah yet Apple hasn't reported one thing for last quarter nor provided guidance for the current quarter. I posted a link to a front page article from the WSJ from early January 2013 where they claimed Apple was cutting orders with suppliers by 60% due to weaker than expected iPhone 5 demand. The stock sold off hard yet nothing in Apple's financials ever bore out this WSJ story. If Apple reports a flat or negative holiday quarter and provides weak guidance for the March quarter then we can have this discussion. But to make declarative statements based off of supply-chain noise, not Apple's financial results is ridiculous.

Fair enough. You are correct past stories like this turned out to be nothing more than Apple preparing for the next model. So perhaps just history repeating itself here. But anecdotally it still seems that the iPhone is saturated and users blasé about upgrading quickly and also, in the U.S., the full effect of the cellco's new "no subsidy" business model taking hold. We'll find out in a couple weeks.